The cryptocurrency market has been underperforming since the start of the week, and the Wednesday candle opened more bearish than the others.
Bitcoin is trading below the $67k level after losing 3% of its value, while Ether has also dropped below $2k.
BNB, the native coin of the Binance ecosystem, is the worst performer among the top 10 cryptocurrencies by market cap.
It has dropped below the $600 mark on Wednesday, marking the sixth consecutive day of correction.
Thanks to this bearish price action, BNB has now lost its place as the fourth-largest cryptocurrency by market cap to XRP.
The bearish price action is further supported by rising short bets alongside negative funding rates in the derivatives market.
Momentum indicators further suggest a deeper correction for BNB as bears remain firmly in control of the market.
BNB could dip lower as the derivatives market looks bearish
Binance’s BNB coin has dropped below the $600 mark after losing 6% of its value in the last 24 hours.
The poor performance is supported by BNB’s derivatives data.
According to CoinGlass, BNB’s long-to-short ratio currently reads 0.91. The ratio dropping below 1 indicates weakening market sentiment, as more traders are betting on BNB’s price to fall.
Furthermore, the OI-Weighted Funding Rate data shows that the number of traders betting that BNB’s price will increase is lower than that of those anticipating a price decrease.
The metric flipped negative on Tuesday and currently reads -0.0002%, indicating shorts are paying longs and suggesting bearish sentiment toward BNB.
BNB bears could push the price to lower lows
The BNB/USD 4-hour chart is extremely bearish as the coin has lost 21% of its value over the last seven days.
At press time, BNB is trading at $589 and looks likely to retest the weekend lows.
If BNB continues this bearish trend, it could decline toward Friday’s low of $570.06, with another support level at $550 also in the cards.
The momentum indicators suggest that BNB could suffer further losses in the near term.
The Relative Strength Index (RSI) on the 4-hour chart reads 25, below the oversold conditions, indicating strong bearish momentum.
Furthermore, the Moving Average Convergence Divergence (MACD) showed a bearish crossover three weeks ago, which remains intact, further supporting the negative outlook.
While the bears remain in control, the bulls could push for control if the Friday low of $570 holds in the near term. If that happens, BNB could rally towards the Inducement Liquidity (ILQ) level at $671 over the next few days.
An extended bullish run would allow BNB to advance toward the weekly resistance level at $709.29.
However, the market conditions are extremely bearish, and a bounce could be slow.
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